Report Outlines SMB SaaS Strategies for Vendors

Software as a service (SaaS) for the small to mid-size business (SMB) market has opened potential opportunities for vendors, and a report released last week by Forrester Research offers some advice for gaining entry.

The report, "Forrester's SaaS Maturity Model," describes a six-step approach to help service providers and independent software vendors (ISVs) assess their SaaS business goals and technical means of achieving a successful SaaS business.

SaaS is going global. Forrester says that North America has the highest adoption rates, the Pacific Rim has the most pilot projects and the European business community has shown significant interest in SaaS. The most notable success for SaaS has been in providing customer relationship management apps to SMBs, such as those provided by Salesforce.com. However, other hosted apps may gain momentum.

Forrester's SaaS Maturity Model describes levels of sophistication of hosted services. It provides tips for making business and technical assessments, with basic questions such as "Who does what for whom?" and "What is the approach for customizing processes, data and user interfaces?"

The maturation range of the Forrester model is from 0 to 5, with 0 being a simple outsourcing of an application by a single enterprise customer. A level 0 operation is not considered to be a true SaaS implementation, according to Forrester's definition. Level 5, at the top, relates to dynamic service applications with a "build for change" approach to application development. By contrast, Forrester puts Salesforce.com's initial CRM operation at level 3.

The SaaS Maturity Model aims to match the technical foundations of the service provider or ISV with its business goals. The report warns that "targeting the highest maturity level is not necessarily the best fit for every vendor."